Summary: Pursuant to a congressional request, GAO reviewed the structural changes undergone by the Polish-American Enterprise Fund and its management company to enable them to operate more like private venture capital companies, focusing on: (1) whether these structural changes were permitted by law; (2) whether the purchase of the Polish Fund's management company by its employees at book value was permitted by law and whether it favored the employees; (3) whether monies earned by Polish Fund management company employees contravened a $150,000 salary cap; and (4) how proceeds from the sale of the Polish Fund's assets will be distributed.
GAO noted that: (1) GAO concluded that structural changes to the Polish Fund and its management company were consistent with applicable legislation; (2) GAO also concluded that the purchase of the Polish Fund's management company by its employees at book value were consistent with existing law and that, under the circumstances, the terms of the purchase were reasonable; (3) furthermore, GAO concluded that Polish Fund management company employees can earn more than $150,000 in annual salary as long as additional amounts are derived from sources other than U.S. funds; and (4) regarding distribution of Polish Fund proceeds, the administration plans to return $120 million to the U.S. Treasury and to provide the balance to a foundation for additional private-sector development in Poland.
